Blossom Company has identified that the cost of a new computer will be $50000, but with the use of the new computer, net income will increase by $7000 a year. If depreciation expense is $3000 a year, the cash payback period is: 5.0 years. 7.1 years. 16.7 years. 12.5 years.

Blossom Company has identified that the cost of a new computer will be $50000, but with the use of the new computer, net income will increase by $7000 a year. If depreciation expense is $3000 a year, the cash payback period is: 5.0 years. 7.1 years. 16.7 years. 12.5 years.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

5.0 years.

7.1 years.

16.7 years.

12.5 years.

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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